CANADA FX DEBT-C$ firms modestly, eyes on Canadian GDP

Reuters Staff

2 Min Read

* Canadian dollar at C$1.1166 or 89.56 U.S. cents
* Bond prices lower across the maturity curve
By Leah Schnurr
TORONTO, Jan 30 (Reuters) - The Canadian dollar firmed
slightly against the greenback on Thursday as upbeat U.S. growth
data helped stem some of the risk aversion in global markets,
while investors were turning their attention to domestic data
due Friday.
The loonie fell as low as C$1.1199 in overnight trade, its
lowest level since July 2009. The currency has made fresh
4-1/2-year lows for three sessions in a row.
Data south of the border that showed U.S. economic growth
was on solid ground in the fourth quarter helped the loonie claw
back some gains. U.S. gross domestic product grew at a 3.2
percent annual rate in the final three months of last year, in
line with economists' expectations.
Still, most analysts expect the path for the loonie remains
downward. Just one month into the year, the U.S. dollar has
appreciated about 5 percent against the Canadian currency.
"I still think that the direction of the flows and the
momentum of the market is for a weaker Canadian dollar," said
Greg Anderson, global head of foreign exchange strategy at BMO
Capital Markets in New York.
The Canadian dollar ended the North American
session at C$1.1166 to the greenback, or 89.56 U.S. cents,
slightly firmer than Wednesday's close of C$1.1178, or 89.46
U.S. cents.
"It would probably take a really good GDP number tomorrow
and a good payrolls number next Friday to arrest the slide in
the loonie," said Anderson.
Friday's focus will be on domestic data that is expected to
show Canada's economy grew by 0.2 percent in November, slightly
softer than the month before.
Canadian government bond prices were lower across the
maturity curve, with the two-year down 1.3 Canadian
cents to yield 0.970 percent and the benchmark 10-year
off 7 Canadian cents to yield 2.374 percent.